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This article examines Epstein's attempt to rehabilitate pre‐modern craft guilds by criticizing my German case study. It demonstrates that his criticisms are baseless and his assertions about European guilds unsupported. Long survival does not establish the efficiency or aggregate economic benefits of any institution. Contrary to rehabilitation views, craft guilds adversely affected quality, skills, and innovation. Guild rent‐seeking imposed deadweight losses on the economy and generated no demonstrable positive externalities. Industry flourished where guilds decayed. Despite impairing efficiency, guilds persisted because they redistributed resources to powerful groups. The ‘rehabilitation’ view of guilds is theoretically contradictory and empirically untenable.
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Sheilagh Ogilvie (2008) studied this question.
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